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News Release

February 17, 1999

DIGITAL VIDEO WATERMARKING TECHNOLOGIES UNITED

Five companies join forces to advance copy protection of digital media content

Five leading computer and consumer electronics companies -- Hitachi, Ltd., IBM 
Corporation, NEC Corporation, Pioneer Electronic Corporation and Sony Corporation -
- today announced that they have agreed to unify their approaches for creating invisible 
electronic watermarks for digital movies and video.

Digital watermarking technology is seen by content providers as critical to 
controlling unauthorized copying of content with future digital recording equipment. The 
five companies expect the first significant application of the new technology to be in 
future DVD (digital versatile disk) systems. Digital watermarks are also expected to be 
used in the copy protection of content distributed electronically via digital broadcasts and 
networks.

Current read-only DVD systems prevent unauthorized copying from pre-
recorded DVD disks by using licensed technologies, such as the digital "content-
scrambling system" (CSS) to encrypt and play back movies. But with the advent of 
digital recording equipment such as recordable DVDs, digital tape recorders and 
personal computers with large storage capacity, additional copy-protection features are 
needed to prevent unauthorized copies of the copyrighted digital content. The five 
companies, which call themselves the Galaxy group, aim to provide such features via 
electronic watermarking technology that permits the copyright owner to specify whether 
content can be copied freely, can only be copied once or cannot be copied at all, 
therefore encouraging the owners to provide consumers with a variety of content.

Although invisible to the user, electronic watermarks contain information that can 
be recognized for example, by a detector chip in consumer digital recorders, or special 
detection software running on compliant PC systems as instructions for enabling or 
disabling its ability to make a copy. In addition to being invisible to users, electronic 
watermarks must survive through normal processes such as digital-to-analog conversion 
and repeated digital compression/decompression cycles while still remaining detectable 
by the digital recorder system.

Background:
The five companies were among 11 that in September 1997 proposed watermark 
solutions to the Data Hiding subgroup (DHSG) of the Copy Protection Technical 
Working Group (CPTWG). The CPTWG is an ad hoc group of experts from computer, 
consumer-electronics and movie-studio industries that was formed to assess the technical 
merits of competing copy-protection proposals for movies, video and other content on 
digital media.

Last summer, following the first round of evaluations by the DHSG, several 
companies sought to strengthen their independent proposals by joining forces. IBM and 
NEC combined their efforts to jointly develop a powerful method for automatically 
creating and embedding robust watermarks that are invisible to viewers. At about the 
same time, Hitachi, Pioneer and Sony focused their extensive expertise in consumer 
products and watermarking technologies behind a separate proposal that featured critical 
technical elements for maintaining the high visual quality of authorized copies and for 
meeting the more demanding requirements of future high-definition television (HDTV) 
content. By combining their expertise across both information technology and consumer 
electronic environments, the five companies now expect their watermarking method to 
provide superior performance for today's needs as well as for future high-definition 
television standards, digital-cinema distribution and other computer-based high-
resolution digital-image applications.

The Watermark Review Panel (WaRP) was formed at the December 1998 
meeting of the CSS (Contents Scrambling Scheme) Licensees to define and execute the 
final evaluations of the remaining proposals for video watermarking. Following the 
formation of the Galaxy group, only two proposals remain for evaluation by WaRP: the 
unified Galaxy proposal and one submitted by Philips, Macrovision and Digimarc. After 
completing its evaluations, WaRP will report its findings to the Interim Copy Protection 
Advisory Council (ICPAC) of the CSS licensing entity, which is expected to select by this 
summer, the watermark proposal that best meets the requirements of the CSS licensees.


<Contacts>

Emi Takase                                     IBM Asia Pacific
Hitachi, ltd.                                  Fred P. McNeese
Tel: +81-3-3258-2055                           Tel: +81-3-5572-2643 
Fax: +81-3-3258-5480                           Fax: +81-3-5572-2443
E-mail: emi@cm.head.hitachi.co.jp              E-mail: fredmc@jp.ibm.com
WWW: http://www.hitachi.co.jp/index-e.html     WWW: http://www.ibm.com

NEC Corporation                                Pioneer Electronic Corp.
Aston Bridgman                                 H. Wakabayashi, H. Seki or T. Akao
Tel: +81-3-3798-6511                           Tel: +81-3-3495-9885
Fax: +81-3-3457-7249                           Fax: +81-3-3495-4301
E-mail: Aston_Bridgman@HO-PRD.ccgw.nec.co.jp   WWW: http://www.pioneer.co.jp
WWW: http://www.nec-global.com

Sony CorporationDaniel Lintz
Tel: +81-3-5448-
2200Fax: +81-3-5448-3061
E-mail:lintz@ccom.sony.co.jp
WWW: http://www.sony.co.jp/SonyDrive.shtml


WRITTEN BY Secretary's Office
All Rights Reserved, Copyright (C) 1999, Hitachi, Ltd.